Value Proposition, “What Might You Be Doing Instead?”

by David Brock on February 13th, 2017

We can learn a lot about value propositions by looking at the vast new array of personal services available through the web.

For example, I have a Virtual Assistant. This person spends a few hours a week doing things I used to do. They are a lot of the administrative tasks that used to take some of my time. I’m paying this person to do these things, but what she does frees up time for me to invest in things that are more important. Things that I just never got around to, because I had to do those administrative tasks.

Many would say, “Dave, why are you paying for these things you used to do yourself, it didn’t cost you anything then?” But, it did, because I had to do those things, there were lots of other things I couldn’t do. For example, now I get a few more hours for prospecting each week. By paying my Virtual Assistant a few hundred dollars a month, I have the opportunity to generate 10’s to 100’s of thousands of incremental revenue. Pretty astounding ROI.

Too often, working with our B2B customers, we forget this could be a huge part of our value proposition. Freeing them ups to focus on higher priorities can be very powerful. However, too often, we focus only on our product and it’s direct impact, struggling to develop sufficient justification or value.

Let me break this case down.

Sometimes what we sell is mission critical. The business case for these is pretty compelling. For example, we help customers address opportunities that drive $100’s millions in revenue, or we save millions in expense. These are hugely important to our customers. It’s pretty easy to catch a customer’s attention, because of the importance and magnitude of the problem we are helping the customer solve. Customers are eager to spend time looking at these types of solutions working with us to solve their problems. And usually the business cases are pretty powerful.

But, for many of us, what we sell is not mission critical. It’s simply not sexy stuff, it’s not that important. We won’t be solving problems that will create $100’s of millions in revenue or expense reduction. We aren’t doing things that are core to the business, yet they are things that still have to be done for the business to operate smoothly.

If we sell those types of products or services, it’s often difficult to see customers. They don’t want to see you because they want to spend their time on things that are more important. That doesn’t mean they don’t have a problem, that they aren’t wasting time or money doing something they can’t not do—even if it contributes little to revenue generation or the company strategic objectives.

Those times when we do catch their attention, their focus is usually on price. The justification is really difficult. We can’t look at increasing revenues, we may look at decreasing expenses a little, but it just isn’t a huge problem area so customers don’t want to invest time in buying decisions, and when they do they look for the best price.

But the customer still has to do these boring, mundane, non-sexy things. They can’t not do them. So the invest time and resources in doing these things.

It’s kind of like my Virtual Assistant. She does things I used to do. She does them well, but I may have actually done them better (more because I had been doing those things so long, not because of any inherent talent on my part). But what she does is free me up to do something else, something much more important to my business–in my case generating $10’s to $100’s of thousands in revenue.

You’re probably thinking, “Dave you’re stretching the point.”

Recently, I worked with a client, they sold software utilities. It wasn’t exciting sexy stuff, like AI or Analytics–things that could have huge impacts on their customers. To be honest, it was really boring software. Without getting into it, it involved cleaning data, maintaining databases, archiving and getting rid of useless data. Typically, customers had to do this manually.

In some of their large customers, small teams of people would have to be devoted to these mundane data maintenance tasks, truly boring stuff, but if it wasn’t done, their core business applications wouldn’t work as effectively and they would struggle to bring up new applications.

The problem they had was the cost of their software. In many cases, it was about equal to what the customer was spending with their teams of people doing it manually. In many cases, there were some savings, but not enough to catch the busy IT executives’ attentions or to overcome the resistance to change.

Given all the other problems their customers had to worry about, this issue kept getting pushed to the bottom of their priority lists. Even though they could save some money, the higher priority things on their lists had a greater impact. My client’s sales people struggled to capture the attention of management.

But then we changed our approach. We started challenging people with the idea, “What might you be doing if you didn’t have to do this?” For example, what work could they assign give to the people that are doing these mundane and frankly boring tasks? I posed the question to one IT executive. He immediately responded, “I’d assign them to do this project (if doesn’t matter what it was).” It was an important project, but he just didn’t have the resources available to do it. It turned out the project actually provided great productivity increases to their operations people–a business case of over $1M in savings.

Suddenly, the executive was really excited to talk to my client. It wasn’t because he cared about their product at all, he really didn’t, but what excited him was what his people could be doing if their time was freed from doing these mundane data maintenance tasks!

Our value proposition isn’t just limited to what we do for the customer. It isn’t limited to the direct problem we solve, in this case mundane IT tasks. Our biggest value is often what we enable people to do instead. Freeing up their time to do something completely different, something that might be more important and have a bigger impact on their business.

Let’s go back to my Virtual Assistant. Hiring her caused me to spend more money than I was spending before. But it enabled me to spend my time on something else, it enabled me to spend my time selling and generating more revenue.

If you have a hot, sexy product/service that is mission critical to your customer, fantastic! It’s actually pretty easy to sell if you do the right job.

But if you have products and services that are on the fringe. That aren’t mission critical, that may even be mundane or boring, you have a huge opportunity to catch the attention of the customer by what you might enable them to do. You might free them up to invest their time and resources in completely different areas—and the value you can claim in enabling them to do those things, can be far greater than just looking at what your product does.

Customers are time and resource constrained. If we can free their time to focus on the things most critical to their business, we’ve created huge value.For a free peek at Sales Manager Survival Guide, click the picture or link. You’ll get the Table of Contents, Foreword, and 2 free Chapters.Free Sample

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Great post, Dave! You could have titled it, “The Usually Invisible, but Often Significant, Opportunity Cost of Mundane Work.” It’s very easy for us to forget that every choice we make involves an opportunity cost. If we decide to do “A,” we can’t also do “B” or “C” or “D.”

I could never get the owner (major shareholder) of my last company to employ enough support staff. He didn’t get what you just wrote. We had business managers who managed nearly $20 million in business wrapping samples to send out to customers, and taking parcels to the local post office !!!!

I´ve known You trough Linkedin. I am learning every day with Your articles.

This is a great post, your point of view gives companies the opportunity of focusing in productive tasks, saving time and resources and applying them where are needed. It is a solid sales argument. Smart idea.

Broadly speaking, Greg, this can be part of needs implication. However, too often, in practice, if sales people are doing this at all, they tend to focus directly on the direct benefits of what they are doing, not the indirect benefits. This can create a huge opportunity cost problem with the customer. I’ve seen lots of cases, where the direct benefits/etc are relatively small, particularly if the customer is assessing a bunch of diverse projects. However, the indirect benefits, the idea that a customer might otherwise invest their resources in something that has a huge payback are completely overlooked.

So, while this concept does fall into needs implications, too few sales people and customers fail to recognize the value of freeing resources to do something else. Thanks for the observation Greg.

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This is Dave Brock's Blog. It offers my views on a variety of business, sales, marketing, and leadership topic. My goal is to make a difference for you, the reader, in both your professional and personal lives.

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